Abstract

We study a model with a single supplier and a single buyer who interact multiple times before the buyer sells her product in the end-consumer market. We show that when the supplier uses a wholesale price contract, even under perfect foresight, the supplier, the buyer, and the end-consumers benefit from multiple trading opportunities versus a one-shot procurement agreement.

Keywords

A significant part of the materials in this invited chapter is from the following original article: Erhun F, Keskinocak P, Tayur S (2008) Dynamic procurement, quantity discounts, and supply chain efficiency. Prod Oper Manage 17(5):1–8.

Notes

Acknowledgements

The first author was partially supported by NSF Award DMI-0400345 and the second author was supported by NSF Career Award DMII-0093844. The authors would like to express their deepest gratitude to two anonymous reviewers for their constructive comments and suggestions.